Senior Conservatives are increasing efforts to prepare for the privatisation of RBS and Lloyds before the next election – even if their share prices remain well below the level they were at when each bank was salvaged at the height of the financial crisis. By claiming Alistair Darling paid too much for shares in the banks during his time as Chancellor, George Osborne is believed to be preparing the public for a large loss of investment. As things stand, the combined loss on taxpayers’ 82% share in RBS and 39% stake in Lloyds current adds up to £24bn. (FT, p1)
A report from the FCA into interest-only (IO) mortgages has revealed that, while 90% of borrowers have a repayment strategy in place, almost half of the 2.6m IO mortgages due for repayment by 2041 face an average shortfall of almost £72,000. The regulator has asked lenders to begin contacting their most at-risk customers, who are due to pay off their mortgages by 2020, in the next twelve months to head off a potential crisis and reduce the threat of evictions. (FT p3, Times p4, Guardian p28, Mirror p58, Telegraph p6)
The average cost of a home has barely changed for the last two years, according to Nationwide. At £165,586, the average house price in April 2013 was just £23 lower than in April 2011, although when inflation is taken into account this equates to a fall. However, signs of life in the property market include the fact that first time buyers accounted for 43% of all purchase loans – the second highest monthly total since 2005 (Mail p80).
The rise of underemployment means that 1 in 10 workers are currently ‘desperate’ for more work, adding up to more than 50 million hours per week of pent-up demand. equivalent to 500,000 unemployed people. The findings come as official data shows the number of unemployed people rose by 70,000 to 2.56m in the three months to February 2013. (Mirror)